Trends in Humanitarian Financing

In 2021, the Covid-19 pandemic continued to overlay other pre-existing and emerging crisis risks, driving need and complicating response. Following the rapid rise in demand for humanitarian assistance in 2020, needs remained at historically high levels in 2021. As multiple drivers of crisis increasingly intersect, crises are becoming more complex and protracted.

Despite this rise in need, provision of international humanitarian assistance has stalled. Worsened by the Covid-19 pandemic, as donors increasingly have their hands tied on funding. The Russian invasion of Ukraine in 2022 is only going to increase this strain further. The system is fragile and reliant on a small donor base. These problems are leading to a growing humanitarian financing gap, highlighted by underfunding of most appeals. Gender-related needs have grown rapidly since the pandemic and funding increases have not kept pace. Furthermore, the deepening of climate change is increasing strains on the humanitarian system, exacerbating existing crises and creating new ones.

These overlapping vulnerabilities increase the need for joined up approach to addressing crises, across humanitarian, development, peacebuilding and climate systems. To address large-scale protracted crisis and reduce need over the long term to free up humanitarian finance to focus on immediate crisis response.

The humanitarian system needs to adapt and step up to promises made in Grand Bargain, exploiting new funding channels and pushing more funding directly into the hands of local actors to improve efficiency and effectiveness.

This chapter presents an overview of the financing landscape in crisis contexts in 2021. This includes traditional humanitarian assistance, as well as alternative funding sources, and analysis of how funding is provided.